Exempt Market Dealers (EMDs) come in many sizes and
business models, but the daily battle is the same – how do I
compete with the bigger and better capitalized IIROC firms and
how do I comply with the increasingly complex and onerous
Many EMD’s compete by chasing smaller deals that would be
of no interest to the larger investment banks and are small enough
to be financed by the EMD’s accredited investor network. This
often leads to EMD’s having, by necessity, a “volume business”
whereby one’s emphasis is on the number of deals as opposed
to the size of deals, making it much harder to earn a respectable
living and pay overhead.
What if you could monetise all sections of your network by
being able to go after larger deals that you would normally have
little hope of being mandated on or financing? What if you had
a partner that could do any size deal over $10,000,000 and you
receive a referral fee for merely making an introduction?
ZED Financial Partners (ZED) is that partner. ZED was
founded in 2002 by Leon Raubenheimer, one of the original four
founders of Griffiths McBurney and Partners along with Barry
O’Neill, an international M&A expert. We combined our skill
sets and created a highly disciplined, process driven model to
financing – Accessing Knowledgeable Capital©.
This model was based on the simple premise that one is more
likely to close a transaction if the transaction is brought to the
appropriate investors that fully understand the business, having
expertise in its sector and it meets the investor’s requirements of
size and industry preference.
This is a much more focused approach compared to the
traditional ‘shotgun approach’. It seems so simple, but how does
one know which investors have expertise in which industries
and what their investment criteria is? These are the questions
that vexed us in 2002. To find answers to these questions, we
laboriously built up our network by meeting and speaking with
hundreds of Private Equity Groups (PEGs) and debt providers in
Canada, the U.S. and Europe over the course of the last decade,
to find out how they preferred to see transactions, along with their
industry and geographical preferences, their size preference and
which types of transactions they have completed.
The database – the secret sauce
Using the data that was accumulated, ZED built its own
large proprietary database. ZED’s proprietary database has over
1,400 PEGs and over 300 Debt Providers, which tracks every
investment that the various PEGs and Debt Providers have made
and is updated daily.
This database gives us a very powerful tool and allows us to
quickly ascertain which funds have invested in a particular sector
and the amount invested. Although there are a number of commercial
databases available, we test them every year and have found them
to be wholly inadequate. Our database is very granular and allows us
to be very specific in targeting investors that have specific industry
knowledge – from Oil and Gas Services, to Heavy Haul Logistics,
to Specialty Confectionary/Chocolates, to Parkinson’s Disease and
Age-Related Macular Degeneration. It also allows us to be indifferent
as to the industry or the financial structure.
The identification of the investors is merely the first step in a very
rigorous deal process. The founders of ZED have collectively closed
hundreds of transactions in their respective careers and have a deep
understanding of what is needed to get deals closed. ZED will manage
all aspects of the financing; from drafting the selling document, helping
the client through the due diligence process, evaluating the financing
proposals and working through the agreements
Our database is geared towards specific types of transactions.
We generally look for transactions requiring $10,000,000 -
150,000,000 of either debt or equity funding in almost any industry.
ZED charges a work fee and a success fee ranging from
3%-6%, equating to cash success fees of between $400,000
and $1,500,000 depending on the size, structure and nature
of the transa ction.
As a rule, ZED will pay a 10% referral fee on the success
fee for just the introduction. No further work needs to be done
by the referring party. It is important to remember that these
are transactions that you are not able to complete yourself and
should be viewed as easy incremental income. We have access
to institutional clients in Canada and abroad giving you access to
investors most EMDs would never be able to access.
If you are an EMD and interested in expanding your network
to institutional clients and going after larger sized transactions,
please contact us.
For more information contact:
EXEMPT MARKET TECHNOLOGY
ZED Financial Partners –
Your EMD Partner Accessing Institutional Clients
Monetizing your network
By Leon Raubenheimer, Managing Partner, ZED